DoD's $264M Engineering Services Contract Awarded to BAE Systems for Naval Support

Contract Overview

Contract Amount: $26,385,820 ($26.4M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2019-11-21

End Date: 2027-03-31

Contract Duration: 2,687 days

Daily Burn Rate: $9.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: REVISE CLOSING TIME

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20003

State: District of Columbia Government Spending

Plain-Language Summary

Department of Defense obligated $26.4 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: REVISE CLOSING TIME Key points: 1. Contract value of $263.8M over its period of performance. 2. BAE Systems Technology Solutions & Services Inc. is the sole awardee. 3. The contract is structured as Cost Plus Fixed Fee, indicating potential for cost overruns. 4. Performance period spans from November 2019 to March 2027, a duration of over 7 years. 5. The contract falls under Engineering Services (NAICS 541330). 6. Awarded by the Department of the Navy, indicating a focus on naval operations support.

Value Assessment

Rating: fair

Benchmarking the value of this $263.8 million contract is challenging without specific deliverables or comparable contracts. The Cost Plus Fixed Fee (CPFF) structure, while common for complex or evolving requirements, carries inherent risks of cost escalation compared to fixed-price contracts. The fixed fee component aims to provide contractor incentive, but the overall cost-effectiveness depends heavily on efficient management and accurate cost estimation throughout the contract's lifecycle. Without detailed performance metrics or a clear comparison to similar engineering support services for naval platforms, a definitive value assessment is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. The fact that BAE Systems was the sole awardee implies they presented the most advantageous offer based on the evaluation criteria. The level of competition prior to award is not detailed, but the 'full and open' designation is a positive indicator for price discovery and potential for competitive pricing.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to better pricing and innovative solutions, preventing sole-source awards that might otherwise be more expensive.

Public Impact

The Department of the Navy benefits from specialized engineering services to support its operations. This contract likely supports the development, maintenance, or modernization of naval systems and platforms. The geographic impact is centered in Washington D.C., where the contract is managed. The contract may have implications for the engineering workforce, potentially creating or sustaining jobs within BAE Systems and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee structure can lead to higher costs if not managed tightly.
Long performance period (over 7 years) increases exposure to potential scope creep or changing requirements.
Lack of specific performance metrics makes it difficult to assess efficiency and value for money.

Positive Signals

Awarded through full and open competition, suggesting a competitive process.
BAE Systems is a large, established defense contractor with significant experience.
Contract duration allows for sustained support and potential for long-term program development.

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the broader defense industrial base. The market for defense engineering services is substantial, driven by the continuous need for research, development, and sustainment of complex military systems. Spending in this sector is often characterized by long-term contracts, high technical requirements, and significant government oversight. Comparable spending benchmarks would typically involve other large-scale engineering support contracts awarded by the Department of Defense to major prime contractors.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large prime contract awarded to BAE Systems, there is potential for subcontracting opportunities for small businesses. However, the extent to which small businesses will participate depends on BAE Systems' subcontracting plan and the specific nature of the engineering services required. Without details on subcontracting goals or actual performance, the direct impact on the small business ecosystem remains uncertain.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Navy's contracting and program management offices. The Cost Plus Fixed Fee structure necessitates robust financial oversight to ensure costs are reasonable and allocable. Transparency is generally maintained through contract reporting mechanisms, though specific details of performance and cost breakdowns may be sensitive. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Naval Systems Engineering Support
Defense Engineering Services
Department of Defense IT and Engineering Contracts
Cost Plus Fixed Fee Contracts
Long-Term Defense Contracts

Risk Flags

Cost Plus Fixed Fee structure carries inherent risk of cost overruns.
Long contract duration increases exposure to changing requirements and potential inefficiencies.
Lack of detailed performance metrics makes value assessment challenging.
Sole awardee to BAE Systems, though competed, warrants monitoring for continued competitive pricing.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.4 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. REVISE CLOSING TIME

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $26.4 million.

What is the period of performance?

Start: 2019-11-21. End: 2027-03-31.

What is BAE Systems' track record with similar Cost Plus Fixed Fee contracts within the Department of Defense?

BAE Systems Technology Solutions & Services Inc. has a substantial history of performing on Cost Plus Fixed Fee (CPFF) contracts with the Department of Defense. CPFF contracts are common for complex, research-intensive, or service-based requirements where the final cost is difficult to predict at the outset. While this contract structure allows for flexibility and contractor incentive through the fixed fee, it also requires diligent oversight from the government to manage costs effectively. BAE Systems' experience with CPFF contracts suggests they possess the necessary infrastructure and processes to manage such agreements, but performance can vary based on specific program management, technical challenges, and the government's oversight intensity. Analyzing past performance on similar CPFF contracts, including any documented cost overruns or efficiencies, would provide a clearer picture of their reliability in this specific contract type.

How does the $263.8 million value compare to other engineering services contracts for naval support?

The $263.8 million value for this engineering services contract awarded to BAE Systems is significant, placing it among substantial procurements within the defense sector. To benchmark its value effectively, comparisons would need to be made against similar contracts for engineering support services provided to the Department of the Navy or other branches of the DoD, specifically those involving complex platform sustainment, modernization, or development. Factors such as the scope of work, duration of the contract (over 7 years), and the specific technical expertise required heavily influence contract value. Without access to a database of comparable contracts with detailed scopes and pricing, it's difficult to definitively state whether this represents a high, low, or average value. However, given the scale and duration, it aligns with the typical investment in specialized engineering support for major defense programs.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract of this magnitude and duration?

The primary risks associated with a $263.8 million CPFF contract spanning over seven years include cost overruns, scope creep, and potential inefficiencies. In a CPFF structure, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. If costs escalate beyond initial projections due to poor contractor performance, unforeseen technical challenges, or inadequate government oversight, the total expenditure can significantly exceed the anticipated amount. Scope creep, where the requirements expand beyond the original agreement without corresponding adjustments to the fee, can also inflate costs. Furthermore, the contractor may have less incentive to control costs aggressively compared to fixed-price contracts, as their profit is fixed. Robust government oversight, clear contract definitions, and proactive risk management are crucial to mitigate these risks.

What is the expected program effectiveness or outcome of this engineering services contract?

The expected program effectiveness and outcomes of this engineering services contract are centered on providing the Department of the Navy with critical technical expertise and support necessary for its operational readiness and modernization efforts. This likely includes enhancing the performance, reliability, and longevity of naval systems and platforms, contributing to mission success. The contract's duration suggests a focus on long-term sustainment, upgrades, or development projects. While specific deliverables are not detailed, the overarching goal is to ensure that naval assets are technologically advanced, well-maintained, and capable of meeting evolving defense requirements. The effectiveness will ultimately be measured by the Navy's ability to achieve its strategic objectives with the support provided by BAE Systems.

How has historical spending on engineering services for the Department of the Navy trended, and how does this contract fit?

Historical spending on engineering services by the Department of the Navy (DoN) has consistently been substantial, reflecting the complexity and scale of its operations and the continuous need for technological advancement and maintenance of its vast fleet. The DoN relies heavily on external contractors for specialized engineering expertise across a wide range of disciplines, from naval architecture and marine engineering to systems integration and cybersecurity. This $263.8 million contract with BAE Systems fits within this trend as a significant, long-term investment in engineering support. It likely represents a portion of the DoN's broader strategy to maintain its technological edge and operational capabilities, potentially focusing on specific platforms, systems, or research and development initiatives that require sustained, high-level engineering input.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0016419R3500

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Compagnie DE Developpement DE L'eau S.A.

Address: 520 GAITHER RD, ROCKVILLE, MD, 20850

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $59,948,595

Exercised Options: $49,325,465

Current Obligation: $26,385,820

Actual Outlays: $1,086,661

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $360,485

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017819D7224

IDV Type: IDC

Timeline